Pricing out Windows Server 2008 for virtualization cost efficiency

Midmarket companies have half a dozen options for Microsoft Hyper-V, with some editions of Windows Server 2008 proving more cost effective for some virtualization strategies.

Microsoft has a half dozen or so options for customers interested in Hyper-V, but what is the most cost-effective version of Windows Server 2008 for midmarket companies that want it for server virtualization?

Part of the answer lies in what you want to use server virtualization technology for, and some lies in how many resources your servers are capable of supplying per virtual machine (VM).

Microsoft Hyper-V is built into all versions of Windows Server 2008 (WS08), but it is also available as a free standalone product and can be used with Microsoft's midmarket Essential Business Server. Here are some of the options:

Windows Server 2008 Datacenter for the Enterprise
Price: $2,999 per CPU
WSO8 capabilities: Support for 16-node failover cluster, dynamic hardware partitioning, virtual machine-to-virtual machine clustering, guest OS-to-guest OS clustering and Quick Migration -- to move running VMs between physical hosts in seconds, and up to 1 terabyte of memory per host OS. The next version of the hypervisor, Hyper-V R2, is now available as a release candidate and has Live Migration.
Number of virtual machines per host OS: It can run an unlimited number of guest Windows operating systems, aka VMs, per physical server.
This WS08 version is designed for: Workloads that require high levels of scalability, reliability and availability to support large, mission-critical applications.

This edition targets customers running at least four to eight virtual machines on a physical server, according to Microsoft. (Some Microsoft customers have up to 30 virtual machines on one physical server, but that is not common.)

Keep in mind that more VMs per server translates into higher memory requirements and the need for heavier-duty servers, but in return you get to run unlimited instances of the Windows Server OS per host physical machine.

"Whether you're a big or small business, the general metric is if you install more than four copies of Windows per physical socket, then the data center edition makes sense," said David Payne, chief technology officer at Xcedex Inc., an integration company based in Wayzata, Minn.

The more workloads you balance across instances of the OS, the better for cost efficiencies. For example, if you run 80 Web servers with low utilization loads balanced across 80 Windows instances on a four-socket server, the expense per VM would be $12,000 (based on the price of $2,999 per socket.)

"$12,000 divided by 80 .. that's $150 per copy for Windows, versus the cost of a standard edition of [Windows Server 2008] at $1,000," Payne said. "So if you have high numbers like that, the data center version is a good deal."

But some scenarios might be out of the price range of small and midsized companies, such as a high number of servers to support workloads spread out across dozens of virtual instances or concentrated on only a few high-powered servers, he added.

Windows Server 2008 Enterprise
Price: $3,999 per processor with 25 client access licenses (CALs)
WS08 capabilities: Failover clustering, Server Core, fault-tolerant memory synchronization and cross-file replication, Quick Migration and up to 1 terabyte of memory per host OS.
Number of virtual machines per host OS: Four guest instances, or VMs, of the Windows Server OS per physical server.
Designed for: Servers running applications such as networking, messaging, inventory, databases and customer service systems.

Most midmarket companies opt to use this version for server virtualization, said Rajiv Arunkundram, senior product manager with the Windows server team at Microsoft. The virtualization needs of companies with up to 250 employees tend to be met by the Enterprise edition, he said, and customers with 500 to 1,000 employees also tend to buy it, but the Datacenter edition makes sense for companies that want to virtualize more than four physical servers.

One Enterprise edition license for a one-processor server running four instances of Windows as virtual OSes is less expensive than one Datacenter edition processor license, and two licenses for the Enterprise edition for a two-processor server running eight instances of Windows as virtual OSes is less expensive than two-processor licenses of the Datacenter edition, for example.

If a company finds that it has to keep adding VMs or if it plans to do a lot of virtualization, then paying a higher cost for the rights to unlimited VMs via the Datacenter edition may be worthwhile, said Mike Cherry, at analyst at Directions on Microsoft in Kirkland, Wash.

Spreading the wealth among VMs is also a smart approach to avoid the failure of all your virtual machines when loaded on one server, but it will cost you, he said.

"If you want several virtual machines per server that run critical applications, you probably want to get higher-quality hardware than you would normally. … You need to buy machines that have virtualization assist processors," Cherry said.

Windows Server 2008 Standard
Price: $999 per processor with five CALs
WS08 capabilities: The basics of the server OS, including Network Access Protection, BitLocker, Read-Only Domain Controller, Public Key Infrastructure enhancements, bidirectional Windows Firewall. The edition also supports up to four multi-core processors, 250 network policy server connections and 250 terminal server connections.
Number of virtual machines per host OS: One guest instance, or VM, of the Windows Server OS per physical server.
Designed for: Web servers

The Standard edition is a cost-effective option for companies looking to run only one virtual machine, or guest operating system, simultaneously with the host operating system. Some experts believe smaller companies may consider purchasing the Standard edition at the lower price point of $999 if they want to add VMs but not invest in additional Enterprise edition server OS licenses.

Windows Essential Business Server 2008
Standard edition: Combines Windows Server 2008, Exchange Server 2007, Systems Center Essentials 2007, ForeFront Security for Exchange and the Threat Management Gateway.
Price: $5,472 with five CALs
Premium edition: All the standard-edition features, plus one SQL Server 2008 Standard edition.
Price: $7,163 with five CALs

As for virtualization, a company can run one instance of each of the roles, i.e., Windows Server 2008 or Exchange Server 2007, on a physical server or in a virtual machine on up to three servers.

The Premium Edition allows for one instance of each of the server roles on a physical server or virtual machine on up to five servers.

There is also a free version of Hyper-V called Microsoft Hyper-V Server 2008 that is available as a standalone download. This version allows for basic virtualization and includes only the Windows hypervisor, Windows Server driver model and virtualization components. It uses a command-line interface instead of a GUI and management console.

"If you only want to do simple server consolidation, say you already have two to three Virtual Server 2003 machines that you want to consolidate, then the free one is the way to go," Arunkundram said.

Let us know what you think about the story; email: Christina Torode, Senior News Writer.

This was first published in May 2009

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